Why these stakeholder groups are important & how they are affected
1. Owners (Shareholders / Proprietors) – Internal
Why important: They invest money into the business and take risks.
How affected:
If the business makes profit → they earn more.
If the business fails → they lose their money.
2. Workers (Employees) – Internal
Why important: They produce the goods or provide the services. Without them, business can’t run.
How affected:
Good business → better wages, job security, maybe promotions.
Bad business → layoffs, low pay, more work pressure.
3. Managers – Internal
Why important: They make decisions, plan work, control operations.
How affected:
Successful business → bonuses, promotions, good reputation.
Failing business → stress, job loss, blame.
4. Consumers (Customers) – External
Why important: They buy the products. Without them, no business can survive.
How affected:
Good business activity → high quality goods, fair prices, good service.
Poor business activity → bad products, high prices, unsafe items.
5. Government – External
Why important: Regulates laws, collects taxes, ensures safety and fair competition.
How affected:
Successful business → more tax revenue, more employment.
Unethical or unsafe business → government must impose fines or rules.
6. Community (Society) – External
Why important: The business operates inside the community—uses their resources, land, environment.
How affected:
Good business → jobs, local development, better facilities.
Bad business → pollution, traffic, noise, accidents.
7. Banks – External
Why important: They provide loans, overdrafts, financial support.
How affected:
Business repayment → banks earn interest.
Business failure → banks lose money if loans can’t be returned.